# Establishing a Branch Office in Turkey for a Foreign Company

# Establishing a Branch Office in Turkey for a Foreign Company

*(A Guide for Global Investors Seeking Local Presence)*

## 1\. Why Establish a Branch Office Instead of a Subsidiary?

For international groups aiming to expand into Turkey without forming a separate legal entity, a **branch office (şube)** offers a strategic middle ground. It allows full operational control under the parent company’s umbrella while benefiting from Turkey’s large and diversified market.

Unlike a limited liability company (Ltd. Şti.) or joint-stock company (A.Ş.), a branch office:

* Has **no independent legal personality**,
    
* Operates **under the foreign company’s trade name**, and
    
* Is **taxed as a Turkish permanent establishment**.
    

This structure is ideal for:

* SaaS or technology firms seeking local compliance presence,
    
* International consulting or engineering groups executing projects in Turkey,
    
* Companies testing the Turkish market before full incorporation.
    

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## 2\. Legal Framework and Registration Requirements

Branch offices in Turkey are regulated under the **Turkish Commercial Code (TCC)** and the **Foreign Direct Investment Law (No. 4875)**.

### Key Authorities:

* **Trade Registry Office (Ticaret Sicil Müdürlüğü)**
    
* **Tax Office (Vergi Dairesi)**
    
* **Social Security Institution (SGK)**
    

### Required Documentation:

1. **Parent Company Resolution:** A board resolution authorizing the establishment of a Turkish branch.
    
2. **Articles of Association:** Apostilled and notarized copy of the parent company’s founding document.
    
3. **Certificate of Good Standing:** Confirming legal existence in the home jurisdiction.
    
4. **Power of Attorney:** Appointing a Turkish branch representative with full authority.
    
5. **Identity and Address Proofs:** For the appointed representative.
    

All foreign documents must be **apostilled and translated into Turkish** by a **sworn translator** before registration.

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## 3\. Step-by-Step Process

| Step | Description | Responsible Party |
| --- | --- | --- |
| **1** | Preparation of corporate documents and notarized translations | Parent Company |
| **2** | Drafting of branch resolution and PoA | Parent Company + OZM Consultancy |
| **3** | Trade Registry application through **MERSİS** system | Local Representative |
| **4** | Tax registration and obtaining a tax number | OZM Consultancy |
| **5** | Opening a bank account and registering for social security | Branch Office |
| **6** | Optional VAT and payroll registration | OZM Consultancy |

Timeline: **Approximately 2–3 weeks** after all notarized and apostilled documents are received.

---

## 4\. Taxation and Compliance Perspective

A branch office is considered a **“permanent establishment”** of its foreign parent in Turkey. Therefore:

* **Corporate Tax:** 25% on profits attributable to the branch.
    
* **Profit Transfer Tax:** 15% withholding tax on amounts remitted to the parent company.
    
* **VAT:** Branches providing services in Turkey are subject to 20% VAT.
    
* **Accounting:** Turkish GAAP (Uniform Chart of Accounts) and e-Ledger obligations apply.
    

There is **no minimum capital requirement**, but the branch must declare an **initial capital allocation** for operational purposes.

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## 5\. Key Advantages

✅ **No local shareholder requirement** — 100% foreign ownership allowed.  
✅ **Full managerial control** by the parent company.  
✅ **Lower administrative burden** compared to a subsidiary.  
✅ **Eligibility for Technopark and R&D zone incentives** (subject to project qualification).

---

## 6\. Strategic Considerations

Before choosing between a **branch office** and a **limited company**, investors should evaluate:

* **Tax repatriation efficiency**,
    
* **Liability exposure of the parent company**,
    
* **Future investment and exit strategy**,
    
* **Eligibility for incentive programs (TÜBİTAK, KOSGEB, Technopark, etc.)**.
    

In practice, **tech exporters and SaaS providers** often start with a branch to test the market and then convert to a local subsidiary once turnover or staff levels justify full incorporation.

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## 7\. OZM Consultancy’s Role

At **OZM Consultancy**, we provide end-to-end guidance for international companies entering the Turkish market:

* **Document preparation and legalization** across jurisdictions,
    
* **Trade registry filing and tax registration**,
    
* **Branch accounting and payroll setup**,
    
* **Ongoing tax compliance and cross-border reporting**,
    
* **Advisory on double taxation treaties and profit repatriation**.
    

We act as your **local compliance partner**, ensuring every step is executed under the Turkish Commercial Code, Tax Procedure Law, and relevant Ministry regulations.

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## 8\. Reach us

If your company plans to establish a **branch office in Turkey**, partner with a **CPA-led advisory firm** that understands both international structuring and local compliance.

📩 **Reach out to OZM Consultancy** to schedule a consultation with our cross-border tax team and get a tailored roadmap for your branch registration and operations in Turkey.

info@ozmconsultancy.com

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